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Month: March 2015

Between 1895 and 1905, the penny arcade enjoyed a preeminent position in the entertainment world. Marcus Loew, who would later establish the Loews theater chain and forge MGM, ran an arcade, so did Adolph Zukor, who established Paramount Pictures, and William Fox, who gave his name to 20th Century Fox. The peep show dominated the arcade, and American Mutoscope dominated the peep show. But William Dickson and Henry Casler were never the type to rest on their laurels. In 1896, two years after completing the Mutoscope, Casler, at Dickson’s urging, developed the Biograph, a projector that allowed film to be displayed on a large screen rather than in a tiny wooden box. The Biograph was not the first film projector — the project was implemented to counter the Edison-backed Vitascope and the Lumière brothers were already making their first films for display via the Cinematograph in France — but American Mutoscope, renamed American Mutoscope and Biograph in 1899, was far better funded than most of its competitors and took an early lead in film projection. By 1908, three years after the first nickelodeon opened in Pittsburgh, D.W. Griffith was making short films for American Mutoscope and Biograph, and not long after that Mary Pickford and the Gish sisters were starring in them. Men like Zukor and Fox abandoned the arcade for the promise of the new motion picture business, and even American Mutoscope chose to distance itself from its roots, shortening its name to American Biograph in 1909. The penny arcade boom was over.

But coin-operated entertainment did not die. Just as the peep show fell out of favor, new advances in engineering resulted in the first practical fully automatic payout gambling machines. As popular as it was controversial, the advent of the “one-armed bandit” brought coin-op companies like Mills and Caille Brothers ever increasing profits and the industry an ever increasing stigma it would take decades to finally shed. As slot machines became increasingly regulated and pushed to the fringes of lawful society by the early 1920s, however, coin-op companies old and new began injecting a degree of skill into their games of chance. By the beginning of the 1930s, this trend culminated in three brothers developing a whole new arcade concept, the Sportland, which focused on games rather than novelty attractions or peep shows, signifying a paradigm shift within the industry.

A Sittman and Pitt five-reel poker machine, the precursor of the modern three-reel slot machine

Unlike the coin-operated amusement industry, which originated in Europe, the coin-operated gambling industry was a largely American phenomenon. This is because games of chance already had a long history in Europe before the advent of coin-operated machines, and consequently so did anti-gambling laws. In France, gaming for money had been prohibited by Louis XVI in 1781 by an edict that had survived the Revolution and the many governments that followed, while in England acts of Parliament passed in 1853 and 1854 severely limited the operation of automatic games of chance. Gambling games were still developed, of course, but the drop case games and allwins of Europe (briefly covered in a later post) were of an entirely different character than the machines that took over the United States, where gambling laws were fairly lax in the late nineteenth century, and the design of coin-operated gambling games flourished.

The earliest coin-operated gambling games were counter top models referred to as “trade stimulators” that usually sat on the bar of a tavern or next to the cash register at a store and gave a patron the chance to wager some of his spare change for the chance to win a prize such as a cigar or a piece of candy. The earliest known machine of this type was the Guessing Bank, developed by New Yorker Edward McLoughlin in 1876, in which inserting a coin would cause a dial to spin and stop on a random number. The patron would guess the number the dial would land on before inserting his penny and win a prize if he was correct. Like other coin-operated devices, however, the trade stimulator did not see wide distribution until the late 1880s. A variety of trade stimulators were developed in Europe during this period, but the spinning dial machine, which entered general use after British inventor Anthony Harris designed a wall-mounted version in 1889, remained the most popular. Before long, however, a new type of trade stimulator gave it a run for its money.

In 1890, Frank Smith of the Ideal Toy Company of Chicago introduced a new machine designed to automate the card game poker, which had first risen to popularity in the United States in the 1830s. Smith’s machine consisted of five reels that each featured a series of playing cards painted on them. When the patron inserted a coin, the reels would spin and each stop on a random card, which the patron hoped would result in a winning hand. If the player won a prize, he could collect it from an attendant. In 1893, the Brooklyn firm of Sittman and Pitt introduced its own card machine, which has been recognized as the first coin-operated gambling game to achieve national popularity in the United States.

By the middle of the 1890s, the trade stimulator had been joined by another type of coin-operated gambling device, the slot machine, which distinguished itself from other early gambling devices by featuring an automatic payout of a cash prize. The first slot machine was developed in Syracuse, New York, by John Lighton in 1892. In this machine, the coin inserted by the player would travel down one of two runways, either being deposited in the machine’s cash box or tripping a lever that caused two additional coins to be released and paid out to the player along with his original coin. In 1893, an inventor in San Francisco named Gustav Schultze combined the slot machine with the spinning dial concept in a device he called the Automatic Check Machine, in which the player pulled a lever on the side of the machine that caused a dial to spin atop a colored wheel. If the dial landed on a winning color, a bell would ring and two coins would be released to the player alongside a token with a random value between twenty-five cents and two dollars. Spinning dial slot machines became very popular over the next two years, but they were ultimately superseded by a new machine invented by a man named Charles Fey.

Charles Fey, developer of the first popular three-reel slot machine

Born in Vohringen, Bavaria, in 1862, Fey clashed with his father, a strict school master and an officer in a conservative church, so he left home at the age of fifteen to seek his fortune. After spending five years in London as an apprentice instrument maker at a shipyard, Fey saved enough money to immigrate to the United States. Arriving initially in Hoboken, New Jersey, in 1882 and settling for a time in Wisconsin, Fey relocated to San Francisco in 1885 to serve as a model maker for California Electric Works. In 1894, Fey left the company with a fellow employee named Theodore Holtz to establish Holtz and Fey Electric Works to go into direct competition with their former employer. At the time, San Francisco was home to a large number of saloons — a legacy of the gold rush in the 1850s — and was also at the heart of the poker craze that had swept the United States, so the city became a major venue for the five-reel card machines just coming into vogue. Both Fey and Holtz became enamored with these new machines, but ultimately decided to part ways, with Holtz establishing his own company and Fey briefly going to work for slot machine pioneer Gustav Schultze before striking out on his own. Working in the basement of his apartment building, Fey designed his first gambling machine, called the Horseshoe, in 1894, and a second machine called the 4-11-44 in 1895, a form of lottery machine in which patrons lined up sets of numbers to win prizes. When these machines proved popular, Fey established Charles Fey and Company in 1896 to focus on the slot machine business.

Fey’s major breakthrough was to combine the two principle gambling attractions of the time: the slot machine and the card machine. Card machines were incredibly popular, but they could not automatically grant a reward, greatly decreasing their utility. Early slot machines could provide a payout, but lacked the excitement of the card games. Fey therefore decided to add an automatic payout mechanism to the five-reel poker machine, but the mechanical challenge proved too difficult. Fey’s solution was to pare down the number of reels on his machine to three. Originally manufactured as the Card Bell sometime between 1898 and 1905, Fey quickly decided to replace the pictures of cards on the reels with images like stars and bells since the player was no longer attempting to complete a poker hand and changed the name to the Liberty Bell. The combination of spinning reels and automatic payout proved irresistible, and the Liberty Bell soon became a sensation in the San Francisco area. The machine did not spread beyond the city, however, as Fey had no desire to mass produce and sell his invention, instead making deals with bar owners to install slots for a fifty percent take of the coin drop. This situation persisted until the disastrous 1906 San Francisco earthquake, during which Fey’s workshop burned to the ground. This loss left a vacuum in the three-reel slot machine business that was quickly filled by the Mills Novelty Company.

As discussed previously, Mills released its first slot machine in 1897, a spinning dial machine called the Owl, one of the earliest models designed to stand on the floor rather than on a counter top. Two years later, a New York manufacturer named Mathias Larkin created a similar machine called the Admiral that was the first slot machine to be advertised nationally and featured an image of Admiral George Dewey, extremely popular after his victories in the Spanish-American War, to help spur sales. Impressed with Larkin’s work, Herbert Mills hired him to open a San Francisco office and serve as his company’s promotional manager. It was no doubt through this branch office that Mills first became aware of Fey’s Liberty Bell. What happened next between Fey and Mills differs based on who tells the tale. Fey and his descendants claim that Larkin took one of Fey’s machines from a local tavern so that Mills could copy and steal the design. The Mills family, on the other hand, states that Fey came to Chicago and offered to turn the design over to Mills in return for receiving the first fifty machines off the assembly line at no cost. As Fey lost the ability to build his own machines in the earthquake and Mills already had a history of buying up the rights to products from other inventors, the Mills version feels more plausible. Either way, the Mills Liberty Bell entered mass production in 1907.

The Mills Bell Machine, which brought the three-reel slot machine to prominence

With the Liberty Bell finally becoming available nationwide, the popularity of three-reel slot machines soared, completely displacing the earlier dial machines and leading the larger manufacturers in the coin-operated amusement business to concentrate almost exclusively on slots. Taking advantage of its head start over the competition, Mills built a commanding lead in the market that would last until the early 1960s. Caille Brothers also quickly embraced the “one-armed bandit” and competed closely with Mills until the end of World War I, when the Detroit company began to fall behind. Mills’ closest competitor thereafter was a manufacturer named Ode Jennings. Born in Kentucky, Jennings entered the coin-op business by moving to Chicago in 1901 to become a salesmen of penny-arcade machines and first gained notoriety through managing the Mills arcade at the 1904 St. Louis World’s Fair. In 1907, he established the Industry Novelty Company in Chicago to deal in used slot machines, vending machines, and scales, which he would often modify with features of his own design. Industry began manufacturing its own slot machines in 1911 and changed its name to O.D. Jennings and Company in 1928. With Mills, Jennings, and more distant competitor Watling all based out of Chicago, the Windy City became the center of the coin-operated gambling and amusement industries by the late 1920s.

As slot machines continued to grow in popularity throughout the first decade of the twentieth century, a backlash began to develop against the machines, which were seen in many circles as nothing more than a way for shopkeepers and saloon owners to cheat honest patrons out of their money. As a result, San Francisco, the original center of the industry, banned slot machines that dispensed a cash payout in 1909, and the entire state of California followed suit two years later. This signaled the beginning of a series of widespread bans that soon left slot machines illegal in most of the country. The beginnings of Prohibition in 1920 further stigmatized the slot machine, as speakeasies that were engaged in illegal activities anyway often included the devices on their premises and the cash-only nature of the business quickly attracted organized crime. Manufacturers were also hit hard by the onset of Prohibition, as bars and saloons had been the primary venue for slot machines, and the closing of these establishments left a hole that other businesses could not entirely fill. While the slot machine industry attempted to compensate for these setbacks by producing machines that awarded prizes of candy and gum instead of money, shops that operated slot machines faced the constant threat of confiscation and other legal action. With slot machines and trade stimulators under attack and pushed to the outer margins of the law by the mid-1920s, several entrepreneurs began emphasizing skill-based elements in their products so they could argue the machines were not purely games of chance. This move ultimately helped revive the penny arcade.

Coin-Op Amusements Make a Comeback

An Exhibit Supply True Love Letter card vendor

The 1910s were a hard decade for the coin-operated amusement business. With the rising popularity of the cinema and the far cheaper production costs of film projection versus peep shows, American Mutoscope and Biograph halted all production of both Mutoscope machines and films in 1906. With the Mutoscope overthrown, arcades had to rely more on their novelty pieces like testers and shockers to draw clientele, but there were only so many ways to build a strength machine or a scale, so without the attraction of new peep shows, there was little reason to come to the penny arcade — unless you were looking for one of the racier films in a seedier location. World War I and Prohibition killed off most of what remained of the business, the former curtailing the development of new machines and the latter closing the bars that had been the prime venue for testers even before they incorporated coin control. The smaller companies in the arcade business could not survive the temporary halt of new machine design brought on by the war, and most of them went out of business. While the larger companies survived, they also abandoned the dwindling arcade scene. Rosenfield Manufacturing left the coin-op business entirely to create electrical appliances like vacuum cleaners, while Caille Brothers turned its entire focus to slot machines after Arthur Caille died in 1919, as Adolph Caille had never really liked the arcade business in the first place. In 1929, Caille began building outboard motors alongside its coin-op production, and in 1937 Adolph Caille sold the firm to a rival motor manufacturer. Only Mills continued to offer a full line of arcade equipment, but it also now focused on slot machines and did not create new arcade pieces, merely continuing to sell its existing line. Just as everyone else was abandoning the arcade, however, one man decided the time was ripe to move in.

John Frank Meyer was born in Peoria, Illinois, in 1881. Entering the printer’s trade, he established his own small printing shop in Chicago before joining a firm called the Exhibit Supply Company in 1907 as a partner. Organized in 1901 as a postcard printer, Exhibit expanded its line rapidly after Meyer joined to become the largest supplier of printed cards for fortune tellers, horoscope machines, and all the other types of card vendors found in the penny arcade. Meyer took full control of Exhibit in 1910 and moved the firm into building its own card vendors in 1914. As the penny arcade approached the nadir of its decline, it actually became a somewhat fashionable spot for young couples to have a risque night out viewing lewd peep shows and purchasing printed love letters from card vendors as souvenirs. By 1917, partially aided by soldiers flocking to city night life to take their girls out one last time before shipping off “over there,” Exhibit card vendors enjoyed enormous popularity and became a key component of the shrinking penny arcade business. After World War I, Meyer decided to introduce a full line of arcade machines and hired Perc Smith, a former production manager for the Meade Bicycle Company and salesman for Mills Novelty with strong credentials in manufacturing, sales, and arcade operation, to sell them. Together, Meyer and Smith built Exhibit Supply into the most important arcade equipment manufacturer of the 1920s.

While the marginalization of the penny arcade and the closing of the bars seriously wounded the industry, companies like Exhibit continued to hang on by transforming the nature of the business. The increasing popularity of the automobile after the introduction of the Ford Model T in 1908 ultimately led the Federal Government to pass the Federal Aid Highway Act of 1921 to connect much if the United States by road. Whereas in the past coin-op sales to smaller towns and rural areas had been factory direct and limited to a small number of saloons and hotels that would pick up their machines at the local train station, the rise of pickup truck delivery services opened up a wider array of small locations like grocery stores, restaurants, barbershops, and candy stores to coin-operated amusements. By the mid-1920s, this led to a development of a new middleman in the coin-operated amusement business, the regional distributor, who would order machines from several manufacturers in large volume and sell them to operators that would maintain machines in multiple locations along a truck delivery route. The operator would be responsible for keeping these machines in good repair and would split the coin drop with the owners of each location along the route to recoup the purchase price. This manufacturer-distributor-operator model of selling coin-operated amusements would persist for decades.

Just as the coin-operated amusement industry was extending its reach into new areas through regional distribution, the increased regulation of the slot machine and trade stimulator lured a variety of new players to the market that were eager to keep the coin-operated gambling industry alive through injecting a degree of skill into their games of chance. One of the first manifestations of this trend was the counter top gun game, in which the player would generally insert a coin into a slot that served as a bullet that the player would attempt to shoot into a scoring hole at the back of a glass-covered playfield in order to win a prize. In the early days of the industry, this would be a cash prize, but as gambling devices came under greater scrutiny, this was usually changed to candy in an attempt to avoid confiscation. While this type of trade stimulator dates back to a model created by Englishmen David Johnston in 1889 and achieved popularity in the 1890s, it did not become an arcade mainstay until a man named Walter Tratsch introduced his version to the industry.

Target Skill by A.B.T. Manufacturing, one of the first popular skill-based coin-operated amusements of the 1920s

Tratsch’s association with the coin-op industry began in 1902 when he joined with Frank Mills, a brother of the founder of the Mills Novelty Company and the man in charge of its East Coast operations, to run a penny arcade in Hoboken, New Jersey. Like slot machine manufacturer Ode Jennings, Tratsch operated arcade machines at the St. Louis World’s Fair in 1904, and he also partnered with Mills to run Owl and Admiral slot machines in the years before his company began mass-producing the Liberty Bell. After operating machines in Panama and Argentina starting in 1908, Tratsch came to Chicago in 1910 to open his first plant, which specialized in machine repair and parts fabrication for the coin-op industry. A trip out West to partner with Charles Fey followed in 1913 before he returned East in 1915 to partner with an acquaintance first met when they were both running coin-op machines at the St. Louis World’s Fair named Jack Bechtol, with whom he established the Diamond Confection Company and the Southern Confection Company in South Carolina to operate coin-op routes in the South. In 1919 the duo established a new company in Memphis that morphed into the A.B.T. Manufacturing Company when another long-time friend of Tratsch named Gus Adler invested in 1921. The company was named by combining the initials of the three owners, though Adler sold out his interest to a Chicago financier named Bill Gray two years later. This company perhaps made its biggest mark on the industry through the introduction of an early coin chute, which required a coin to travel down a ramp before activating a machine and therefore made slugging much more difficult.

In 1925, A.B.T. relocated to Chicago and debuted one of the most important coin-operated machines of the 1920s, a countertop pistol game called Target Skill. Like earlier gun trade stimulators, Target Skill featured a glass-protected target area housed within a wooden cabinet, but unlike these earlier machines, the game provided five small steel balls as ammunition for the cost of a penny. The objective was to shoot these balls into five target holes of decreasing size, with each direct hit causing a flag to drop over the target. Unlike slot machines, there was no payout mechanism attached to the machine, making it a pure game of skill free of the legal challenges and confiscation hassles plauging most countertop devices. An instant success, Target Skill games were soon being produced at a rate of 2,000 a month as sales reached 40,000 units within a decade. Once the popularity of the game was well established, A.B.T began releasing variants that featured different playfield configurations and/or more prominent payout elements. These included the popular Big Game Hunter, in which a successful hit on one of the three targets would cause a slot machine reel to spin and lining up the proper targets would allow the player to obtain prizes such as a small cash payout or a pack of cigarettes from the operator, and the Challenger, which provided ten shots for nine scoring holes. A.B.T. continued to sell variations on Target Skill until the early 1960s and manufactured over 300,000 of them during that time. As one of the earliest coin-operated products to gain widespread popularity by focusing primarily on player hand/eye coordination and skill rather than on strength/endurance testing, vending, or random chance, Target Skill represented one of the first attempts to move coin-operated products from novelties and gambling concepts to actual games, paving the way for a major paradigm shift in an arcade industry that had remained stagnant for nearly two decades.

The Erie Digger, which launched the first crane game boom

A second concept particularly important to reviving the arcade was the coin-operated digger, or crane, machine, which like the new target shooting games combined elements of both skill and chance. Sources differ on when exactly the first digger machines entered the marketplace, but most evidence points to the first models appearing in 1924. In that year, Norwat Amusement Devices introduced the Steam Shovel, while the Erie Manufacturing Company began selling its Erie Digger, which dominated the market into the early 1930s. By 1926, digging machines had become standard fare at boardwalks and amusement parks, but were particularly attractive for traveling carnivals due to their compact size and relative simplicity. In fact, it was a carnival concessions operator named William Bartlett who introduced the next important advance in crane games in 1926 with his popular Miami Digger, which allowed the patron to move the crane all around the inside of the box rather than just up and down as in earlier models. Unlike Erie, Bartlett did not mass produce and sell his machines, but instead dispatched licensed agents to travelling carnivals around the United States and Canada, who would operate banks of 12-17 units on his behalf. By the time Bartlett died in 1948, over forty operators were supplying cranes to all the major carnivals in North America. While crane machines only vended candy at first, it did not take long for operators to offer silver dollars, paper currency, and bundles of coins wrapped in cellophane as prizes instead.

With the success of Target Skill and the carnival diggers, an array of new coin-operated games appeared in the late 1920s. Exhibit Supply remained in the forefront of the market by readily embracing new machine concepts. These included a popular crane game called the Iron Claw that debuted in 1927 and a target shooting game called Automatic Pistol Range launched in 1929 in which one or two players shot at targets mounted on a motorized carriage that rolled across a playfield housed in a large wooden cabinet. Even Mills released a new punching bag strength tester in 1926. Perhaps the most surprising return of the decade, however, was the Mutoscope, brought back by a businessman named William Rabkin.

William Rabkin, the founder of International Mutoscope

Born in 1894 in Babruysk, then part of Russia now part of Belarus, Welvel Rabkin — clerks at Ellis Island made him a William — entered a trade school at the age of twelve and spent three years learning how to be a machinist. Rabkin’s father ran a modestly successful wholesale farm produce business until a warehouse fire bankrupted him, and he immigrated to the United States to work as a garment presser in New York City. After becoming established there, he sent for the rest of his family, who joined him in 1909. After stints as a plumbers apprentice and electrician’s helper, Rabkin finally found work in a machinist shop. Several years later, he and a partner established their own shop. After a falling out, however, Rabkin sold his interest in the shop and looked for another business involving machines. This quest led him to American Biograph and the Mutoscope in 1920.

Once a leader in the film industry, Biograph fell on hard times in the 1910s. In 1908, the company joined with Edison to form a trust called the Motion Picture Patents Company that dominated film distribution and limited production to a small number of allied studios, but the Federal Government broke up the firm in 1915. In the meantime, Biograph had declined to enter the new feature film business due to the expense involved, causing Griffith to leave with most of the company’s stars. Now that feature films were taking off, Biograph lagged the competition and could no longer rely on its monopoly to stay relevant. The company released its last short film in 1916 and thereafter relied on reissues of its old films to barely stay afloat. For this reason, the company was more than happy to sell Rabkin its entire stock of Mutoscope machines and films.

American Mutoscope had never sold its peep shows, instead licensing the machines and the films to play in them to penny arcades. Rabkin decided that in order to turn a profit, he would have to sell his wares instead, but there was little interest among arcade operators due to a lack of new content. Rabkin therefore commenced production of new short films in 1924, creating roughly five hundred reels in a variety of genres before shutting down production again in 1933. Sales remained sluggish, however, until 1926, when the Mutoscope suddenly became fashionable again in Britain. As sales took off overseas, Rabkin’s business grew rapidly, and he was able to combine his experience as a machinist with a new influx of capital to expand his arcade offerings beyond the peep show business.

The first original machine International Mutoscope created was the Shootoscope, a countertop target shooting trade stimulator released in 1926. Like other games in the genre, play consisted of inserting a penny into a coin slot, which the player then fired at a target housed in a glass-covered wooden case. If the player’s coin hit the whole in the center of the target, it would be returned to the player. Next, Rabkin developed his take on the classic fortune telling machine — marketed as Grandmother’s Predictions — which debuted in 1928. Both machines remained popular for years, but Rabkin experienced his greatest success through the newly emerging crane games.

During his lifetime, William Rabkin claimed to have invented the coin-operated digger after taking inspiration from watching a steam shovel dig out the foundation of a building while he was still working as a young machinist shortly after coming to the United States. In truth, by the time Rabkin developed his Electric Travelling Crane in 1928, diggers had already been a popular attraction for several years, and he likely just adapted machines that he had already seen at carnivals and arcades. Indeed, the Exhibit Supply Company thought Rabkin’s crane was so similar to its own Iron Claw, that it sued International Mutoscope for patent infringement. Regardless of the source, Rabkin continued to improve his device over the next several years, and by 1933 the Travelling Crane had played a crucial role in igniting a digger boom that swept across the United States and Europe. Before long, crane games housed in elaborate art deco cabinets could be found not only in penny arcades and carnivals, but also in department stores and hotel lobbies. There were even so-called “craneland” arcades that housed nothing but digger machines. By 1936, Rabkin had sold over 25,000 diggers, a significant number for a large arcade piece of the era.

While cranes, gun games, and card vendors began enjoying increasing popularity in the mid 1920s, the venues for these games remained relatively limited at first due to the continued sluggishness of the penny arcade business. Arcades were still associated primarily with peep shows and novelties in this time period, and the appeal of these machines had waned years before. Even with International Mutoscope now releasing improved viewers and new reels, interest in the peep show remained relatively muted in the United States. A new paradigm in arcade entertainment was desperately needed, and it was finally provided by the Chester-Pollard Amusement Company.

The Chester-Pollard Play Football game, which brought competitive sports games to prominence in the arcade

The three Chester brothers — Pollard was their mother’s maiden name — entered the amusement industry in the early 1920s with a fortune telling machine. Frank Chester, an electrical engineer, was the visionary behind the company, while Charles was an expert in mechanical technology, and Ernest was a consummate businessman. In 1926, a British manufacturer named Freddy Bolland called on Chester-Pollard in New York to see if the brothers might be interested in the North American manufacturing rights to a manikin football game for which he owned the patents. In this game, housed in a large wooden cabinet, two players would control the sides of a football match by pressing a lever to cause all the players to kick their legs at once. For a nickel, the players would get a single ball and would have to time their kicks to score a goal on their opponent. Score could be kept using a set of beads strung along the top of the cabinet, but every time a goal was scored, a new nickel would have to be inserted to keep playing. Chester-Pollard agreed to take on the product, built 100 units, and tested them at select locations over the course of a year. Proving itself a huge moneymaker, it was released generally in 1927. Next came a mannikin golf game, which despite a relatively steep price of $150 for the penny model and $175 for the nickel model sold over 7,000 units. In 1929, a horse racing game called Play the Derby debuted, in which two players turned cranks to drive horses around a track, and became yet another hit. Chester-Pollard games were soon appearing in thousands of hotels, clubs, and railroad depots and could even be found on steamship lines.

With their competitive sports games doing so well, the Chester Brothers decided to expand into sports tables that did not incorporate coin control. Baseball, table tennis, hockey, and bagatelle tables were tested in exclusive locations such as the Lido and Westchester-Biltmore Country Clubs, where they proved a tremendous success. Based on these results, the Chesters believed they could pioneer a new arcade concept based around table games and exercise machines with and without coin control. They named this new concept the Sportland.

In 1930, Chester-Pollard began testing the Sportland concept in existing arcades such as Playland Park in Rye, New York, owned by William Rabkin of International Mutoscope. When these locations proved successful, they opened a purpose-designed Sportland in an outlying district of Brooklyn. In its standard configuration, the Sportland featured a small array of coin-operated machines such as gun games or diggers in the front of the establishment and a large table game area in the rear blocked off by a fence. For a quarter, a patron could spend thirty minutes playing all the table sports games they wanted. The old penny arcade had failed when the public grew tired of peep shows because they had to be situated in a major thoroughfare to attract volume patronage, but owners could no longer afford the correspondingly high rents. Sportlands, on the other hand, quickly attracted patrons whether they were located on a major street or not, and by the summer of 1931 they were a sensation throughout the New York area.

The onset of the Great Depression in 1929 cemented the arcade revival. With worsening economic conditions severely restricting the amount of money most Americans could afford to spend on leisure in the early 1930s, arcade machines that could be played for just a nickel or even a penny became one of the few affordable activities in the country, causing revenues from coin-operated amusements to skyrocket. In 1930, over 250 companies manufactured 250,000 units of over 400 different games, and by 1934 these manufacturers were taking in more than $10 million annually. Meanwhile, Chester-Pollard had established fifty-two Sportland arcades in the New York City area alone by 1933, and they became a model for entrepreneurs all over the nation. Consequently, the arcade completed its transition from a novelty attraction to a venue for games of skill, taking on the basic form it would maintain for the next sixty years. Before long, many arcades were taking in over $800 worth of pennies and nickels a week, while prime locations could pull in as much as $1,200 a week despite an ever-worsening economy. Gun games, competitive sports games, and diggers all played their part in this renaissance, but the most important contributor by far was a relatively new amusement called pinball.

The birth of the first viable electronic interactive entertainment industry in 1972 resulted from the convergence of two separate forces: computer technology that was finally becoming cheap enough to incorporate into a mass market entertainment product thanks to advances in integrated circuits, and a coin-operated entertainment business with well developed manufacturing and distribution channels across the United States, Western Europe, East Asia, and South America. In the period before cost-effective large-scale integration, an affordable, feature-rich home video game remained a nonviable proposition (yes, there was the Magnavox Odyssey, to be discussed later, but it was primitive and arguably did not deliver a good cost-to-game-play ratio), but the coin-op industry represented an outlet into which a company could sell a $1000-$2000 product to an operator for use by the general public, who would help the operator recoup his costs one quarter at a time. Therefore, to fully understand the dawn of the video game age, it is helpful to pause and look back on the first hundred years of coin-operated entertainment, roughly spanning the period from 1871 to 1971.

NOTE: And here we are again with a historical interlude, which will cover the history of coin-operated amusements in six parts. The information in this post is largely drawn from Automatic Pleasures by Nic Costa, Arcade 1: Illustrated Historical Guide to Arcade Machines by Richard Bueschel and Steve Gronowski, and an article entitled “The Penny Arcade” in the March 15, 1947 issue of Billboard Magazine.

The Birth of Coin-Op

The Miser, a coin-operated working model created by John Dennison

In its broadest definition, the coin-operated machine industry encompasses all those automatic devices that provide a commodity or service in exchange for currency inserted into a slot or feeder. The industry is usually subdivided along the lines of the service rendered, whether it be vending an item, playing music, offering the opportunity to win a cash prize, or providing a few moments of entertainment. The idea of inserting a coin into a slot in order to receive a commodity first occurred as early as the first century of the common era when renowned mathematician Hero of Alexandria published plans for a device that would dispense holy water at Egyptian temples. The first coin-operated vending device to enter general use was the “honour box,” a small wooden or metal box with a spring-loaded lid that would open when a coin was inserted, which first appeared in England around 1615 and became popular in that country by the eighteenth century. The name of the device derived from the need to trust that a patron would only take a pinch of snuff for his coin, as these devices were incapable of regulating delivery. Due to the difficulties inherent in policing the use of these early coin-operated devices, a wider automatic vending industry did not develop until the dawn of the Industrial Revolution.

In 1822, bookseller Richard Carlisle took the first halting steps towards a practical coin-operated vending machine. A professed radical, Carlisle often ran afoul of the British authorities for selling prohibited and proscribed books, subjecting both himself and his assistants to prosecution. Carlisle’s solution was a contraption added to the front of his shop featuring a coin slot and a dial. A patron would insert a coin and select the book he wanted by turning the dial to the appropriate title, after which the item would be delivered through a chute. This was not a fully automatic device, however, as the book was placed into the chute by hand by one of Carlisle’s assistants. The idea was that if a buyer did not know who actually provided the book, no one could be placed on trial for selling seditious literature. Unfortunately for Carlisle, the ploy did not work.

By the 1830s, further advances in mechanical technology led to the introduction of the first honour boxes in England that automatically regulated the delivery of snuff, which was provided in a paper package and delivered through a coin-regulated drawer. Following the introduction of the first postage stamps to the United Kingdom in 1840, an inventor named Simeon Denham took his own crack at the vending machine with a device that automatically cut a stamp from a roll and delivered it to the customer upon the insertion of a penny. The machine was patented in 1857, the first coin-operated machine with that distinction, but it proved unsuccessful and never entered mass production. In the end, the first successful coin-operated devices would not be vending machines, but rather amusements.

In the mechanical age, viable coin-operated entertainment required sophisticated clockwork mechanisms powered by some combination of pulleys, springs, levers, and gears. Archaeological evidence demonstrates that the Ancient Greeks possessed a sophisticated understanding of the necessary clockwork, but much of this knowledge was lost in Europe during the early Middle Ages and would not be fully recovered until the fourteenth century after being reintroduced from the Islamic world. By the eighteenth century, clock makers were beginning to expand their art beyond time keeping devices with such celebrated creations as Frenchman Jacques de Vaucanson’s mechanical flute player crafted in 1738 and a series of automata created by Swiss clock maker Pierre Jacquet-Droz between 1768 and 1774. While these machines were largely created on the Continent, however, they were primarily displayed in Britain, which held a fascination with all things mechanical as the Industrial Revolution took hold. Public exhibition of automata commenced on the island nation in 1772 with the establishment of the Coxes Museum in London by James Cox. By the 1830s, exhibitions could be as large as 200 machines, and by the 1860s automata began appearing not just in permanent exhibitions, but in travelling shows as well.

The automata of the late eighteenth and early nineteenth centuries required an attendant to operate, but they eventually evolved to incorporate coin control. The earliest known machine of this type was a fortune telling device patented by J. Parkes in 1867. Fortune tellers were a popular staple of fairs, so Parkes developed a machine that would provide a disk with a question on it for a penny. The patron would then insert the disk into a slot, thus sending it down a runway peppered with holes. Each disk was a different diameter, so it would only go down a particular hole, causing an appropriate fortune to print on a ticket vended to the patron. Parkes apparently never publicized his invention, so the first widely exhibited coin-operated amusement was a device developed by Henry Davidson and first displayed in 1871 in which a mechanical chimney sweep would jump from the chimney of a house when a penny was inserted. This machine was the first of the so-called “working models,” which were particularly popular in Britain and consisted of figures that would come to life and perform actions when a coin was inserted. Davidson booked his machine into every agricultural and industrial fair he could and soon spawned many imitators.

The first recorded individual able to make a living entirely through the manufacture of coin-operated machines was a Leeds mechanic named John Dennison. In May 1875, Dennison displayed his first working models, demonstrations of a drilling machine and a hand lathe, at the Yorkshire Exhibition, which were well received by the public. He soon began building both mechanical fortune teller machines and working model dioramas for installation at exhibitions, fairs, and bazaars. By 1882, Dennison had been joined by a host of other manufacturers as working models became a popular diversion. In the early 1890s, Dennison struck a deal with the Blackpool Tower Company — formed to build a replica of the Eiffel Tower in the English coastal resort town of Blackpool — to supply his working models to the tower exclusively from its opening in 1894. This arrangement afforded Dennison a steady income for the rest of his life and continued long after his death in 1924 until his daughters finally sold their interest in the venture to Blackpool Tower in 1944. The tower continued to operate the original machines until 1963.

John Dennison was a successful manufacturer and operator of coin machines, but he was not much of an entrepreneur. While his business was profitable, he never mass produced his working models or sold them to other concerns: every piece was custom built and operated by him and/or his family. Therefore, while he played a critical role in the spread and acceptance of coin-operated amusements, he failed to jump start a full-fledged industry. It would fall to others to bring con-operated devices fully into the mainstream, most notably an inventor named Percival Everitt.

A Mills Novelty Company coin-operated shocker built c. 1900. Such machines were popular for decades after first being developed in 1886.

Little known today, Everitt deserves more than any other individual the title “father of the coin-op industry,” for no man did more to spread coin-operated technology around the world both through his patented designs and the many companies he established to sell them. Everitt entered the industry on the back of one of the newest crazes in Europe: the postcard. First developed in Austria in roughly 1869, the picture postcard soon became a staple as a convenient way to send a message home from abroad or to keep as a memento of a trip. In 1874, the Treaty of Bern established the General Postal Union with a mandate to coordinate postal policies among the treaty’s twenty-two signatories. This led to the standardization of postcard size and cost, making them particularly well-suited to coin control. In 1883, Everitt and a partner, John Sandeman, introduced a cast-iron machine in London that vended a postcard for a penny. In 1885, Everitt introduced an improved model and established the Post Card and Stamped Envelope Supply Company, which placed over one hundred post card vending machines around London. In November 1887, Everitt established another company, the Sweetmeat Automatic Delivery Company (SADC), that played a decisive role in the spread of the vending machine. Starting from a base of 1,500 machines around London, SADC quickly opened branch offices in Birmingham and Manchester and signed agreements with 31 companies to supply its machines with commodities such as quinine, chocolate, chewing gum, cigarettes, matches, and perfume. By 1901, the company sported a market capitalization of £1.5 million and had placed at least one machine in nearly all of Britain’s more than 7,000 railway stations in addition to many public houses, hotels, and shops.

Everitt did not just concern himself with vending machines. In 1884, he patented a coin-operated scale that could measure a person’s weight and then established the Weighing Machine Company the next year to sell this invention. The coin-operated weighing machine quickly became a sensation and could be found in all manner of public places. Other than the vending machine, no coin-operated machine of the 1880s or early 1890s approached the scale in popularity, and for many people the weighing machine was their first exposure to coin-operated amusements. In the wake of the success of the coin-operated scale, Everitt led a host of British inventors that turned their attention to the various attractions found in bars and saloons, which often featured devices such as grip, punch, and lung testers that patrons could use to settle arguments about who was stronger, but did little to increase revenue for bar owners aside from a small amount of custom from the losers buying drinks for the winners. Sensing an opportunity, these men began designing coin activated testers, thereby allowing owners to monetize these contests. Important inventors besides Everitt included Richard Page, who patented the first strength testing machine in 1885, and William Oliver, who, like Everitt patented machines in a wide variety of fields, including one of the first successful electric shock machines in 1886. At the time, electric shocks were considered to have great health benefits, and machines that delivered a jolt of electricity to the patron were perhaps the third most popular coin-operated devices of the period after vending machines and scales. By 1890, all manner of coin-operated testers could be found in bars, saloons, and taverns, but, shockers aside, these devices held limited appeal for the general public. At the same time, however, another technological marvel of the late nineteenth century soon paved the way for the first venues solely devoted to coin-operated amusements.

The Dawn of the Arcade

William Smith’s locomotive working model, the earliest known coin-operated amusement produced in the United States

While the genesis of the coin-operated machine industry occurred in Great Britain, it was in the rapidly industrializing United States that the modern arcade industry first took shape. Many of the earliest coin-operated machines in the U.S. were either introduced by British inventors or modeled after their creations, and once again Percival Everitt led the way. Frustrated by the fierce competition and relatively scarce capital in England, Everitt leaned on family connections to come to the U.S. in 1885 and secured an agreement with one of the country’s only exporters, E. & T. Fairbanks Company of St. Johnsbury, Vermont, to sell his coin-operated weighing machine in North America. The next year, he set up the Automatic Selling Machine Company in New York City to sell his penny postcard vendors at street car stations.

Everitt’s activities in New York soon attracted the attention of another entrepreneur named Thomas Adams. A Staten Island native, Adams had attempted several professions before becoming a photographer in the 1860s and taking on an unusual boarder in his home, former Mexican President Antonio López de Santa Anna. As Adams’s photography career stalled, Santa Anna suggested that he try establishing a business based around the natural gum produced by the chicle plant, which Santa Anna could acquire cheaply from friends in Mexico and which had the potential to become a snythetic rubber substitute. While Adams’s attempts to manufacture rubber products from chicle failed, he soon came to realize that he could add sugar to the substance to produce a kind of chewing gum, a candy that had existed the United States since 1848 but had never caught on in a big way. First going on sale in February 1871 for a penny a piece, Adams’s chicle gum launched the modern chewing gum industry and led to the formation of Adams, Sons, and Company in 1876. When Adams encountered Everitt’s vending machines, he quickly secured the American patent rights from the inventor, adapted them to vend his Tutti Frutti gum, and began installing them in New York City rail stations in 1888. While the Adams machine was not the first gum vendor introduced in New York and sources differ on how successful they were, their introduction appears to have helped provide a catalyst for massive expansion in the design and operation of coin-operated devices in the United States.

In amusements, the United States began by following the same basic pattern as the United Kingdom, starting with working models and then moving into testers and electric shockers at bars and saloons. Unlike in Britain, however, American working models focused less on dioramas of events and more on the new industrial machines that were transforming the nation. The first of these devices, indeed the first known American coin-operated amusement, was a model train created by William Smith of Providence, Rhode Island, in 1885, which sported an actual engine powered by a wet cell battery that came to life upon the insertion of a nickel. Smith placed his trains in several East Coast railway stations as well as the Coney Island Amusement Park. Train and steamboat models by Smith and others were soon popular around the country, but it was another American invention, the phonograph, that would birth the arcade.

Thomas Edison poses with his phonograph

As early as 1807, scientists had discovered it was possible to trace the vibrations made by objects such as tuning forks, but it was not until 1857 that Frenchman Édouard-Léon Scott de Martinville created a device that could record soundwaves. Called the Phonautograph, Martinville’s device worked by linking a parchment diaphragm to a bristle that would trace a line through a thin coating of soot onto a sheet of paper wrapped around a metallic cylinder when it detected vibrations. This device could not actually play back recordings, but in 1877 American inventor Thomas Edison, while working to automate the playback of telegraph messages, devised a system using an electromagnet that would record the vibrations on a tinfoil-covered cylinder in a manner that would allow playback by another machine. These tinfoil recordings were extremely fragile, however, and rarely lasted long. Edison abandoned work on the phonograph soon after due to an inability to find investors to improve it further, but Edison’s rival, Alexander Graham Bell, soon commissioned his own recording project at his Volta Laboratories, where by 1881 Charles Tainter and Chichester Bell had created an improved version called the Graphophone and developed a cylinder created out of wax, which could be played over one hundred times before wearing out. In 1886, Bell formed the Volta Graphophone Company to continue developing sound recording technology. By the next year, Bell had enticed a group of Philadelphia businessmen to establish the American Graphophone Company to market and sell the device. In 1888, a businessman named Jesse Lippincott, who had recently purchased both the American Graphophone Company and the Edison Speaking Phonograph Company to consolidate all the important sound recording and playback patents, established the North American Phonograph Company to serve as the exclusive seller of phonographs in North America. He proceeded to divide the country into territories that he assigned to local franchises. The phonograph soon attracted wide interest, but it remained a complicated and expensive piece of technology that remained out of the reach of the working class, making it a perfect candidate for coin-operated control.

The first known coin-operated phonograph was patented in 1888 in Britain by electrical engineer Charles Adams Randall, who called his machine the Automatic Parlophone. The first known coin-operated phonograph in the United States was installed at San Francisco’s Palais Royal Saloon in November 1889 by Louis Glass of the Pacific Phonograph Company — one of Lippincott’s many franchisees — and before long this device joined the testing machines in bars, saloons, and railway terminals across the country, allowing patrons to insert a nickel in a coin slot to hear a song or brief recorded message. While bars and saloons were perfect venues for testers, however, they were less than ideal for phonographs. While coin acceptor technology was improving, too many patrons were still able to “slug” the unsupervised machines by using buttons or washers in place of coins to earn a free play, and they could often be rough on them as well, causing frequent breakdowns. Furthermore, the cylinders needed to be changed out constantly to hold patron interest, while the largest potential audience, women and children, had limited access to the devices because they did not frequent bars. As a result, these early venues for the machines were unsuited to providing the level of care, maintenance, and exposure necessary to maximize the profits from this new form of amusement. The man who ultimately provided the solution to these problems was James Andem, the president of the Ohio Phonograph Company.

Born in Massachusetts in 1842, James Lambert Andem grew up in New York City. After serving in the Union Army during the Civil War and rising to the rank of first lieutenant, Andem entered the stenographer’s trade. Moving to Washington, D.C., Andem was an early adopter of the Volta Graphophone to help with creating transcripts of court and legislative proceedings. When North American Phonograph began dividing the country into sales territories, Andem decided to take Ohio and established the Ohio Phonograph Company in 1888.

In 1890, Andem responded to the inherent problems in operating coin-operated phonographs by opening storefront locations in Cleveland and Cincinnati featuring a dozen phonographs grouped together, allowing an attendant to monitor and maintain the machines and giving patrons a clean, women and children-friendly environment in which they could listen to a series of melodies in rapid succession. Andem opened his Cincinnati location in a building called the Emery Arcade, which may be the origin of the term “arcade” referring to a coin-operated amusement facility, though it is also possible that the use of the term “arcade” in this manner merely evolved because coin-operated businesses became a fixture of the big-city shopping arcades that were a precursor of the modern shopping mall. In Britain, where facilities grouping together various coin-operated amusements became common in the mid 1890s, the venues tended to be referred to as “automatic shops” instead.

The Mutoscope, the prime attraction of the early penny arcade.

By 1893, there were over 100 phonograph parlors located in big cities around the United States, but the start of a depression that year nearly killed the business. In the meantime, however, Edison had hit on another new idea in 1888, a device that could display moving pictures. At the time, stereo scope viewers, in which a person examined a picture through a special eyepiece that made it appear three dimensional, had been popular for some time, and had first incorporated a coin slot two years earlier in 1886. In fact, the same year Edison decided to explore moving pictures, a German named C. Bach introduced a viewer called the Kalloscope that proved one of the most popular, and most imitated, coin machines of the late nineteenth century. In this device, a series of pictures were placed on a chain inside a wooden box, and the user could rotate through the series by turning a knob. By the 1890s, stereo viewers incorporated motors that automated the movement of the pictures. Edison’s idea was the next logical step, in which the pictures cycled so quickly as to give the illusion of seamless, real-time movement.

While the initial idea of a motion picture machine belonged to Edison, building on earlier work by pioneers such as Coleman Sellers and Eadweard Muybridge, the majority of the actual work of creating the device was performed by one of his most talented employees, William Dickson. Born in France in 1860 to Scottish parents, Dickson spent his formative years in Britain. As a teenager, Dickson became fascinated with Edison and his inventions and even wrote him a letter offering his services. Therefore, after his family immigrated to the United States in 1879, Dickson traveled to Edison’s electrical equipment factory in New York City in 1881 and charmed the inventor into giving him a job. Two years later, Dickson had risen to manager of the Electrical Testing Department, and by 1886 he had become a personal research assistant to Edison. By 1892, Dickson had responded to the moving picture challenge by creating the Kinetoscope, a device that allowed a patron to peer through a window on a cabinet to view a series of still photos presented in rapid succession on a strip of perforated celluloid film to give the illusion of movement. In 1893, Edison formed a partnership with a banker named Norman Raff to commercialize the device, who established the Kinetoscope Company as its exclusive North American distributor. Raff also helped organize the first public display of the new technology, which made its debut at the 1893 World’s Fair.

The Holland brothers, two Canadian businessmen who became the East Coast agents for the Kinetoscope Company, opened the first Kinetoscope parlor on April 14, 1894, in New York City with ten machines each showing a different movie. The device proved a smash hit as the parlor averaged $1,400 a week over the course of its first year of operations. The Hollands expanded to other cities, sold international franchises in Europe, and were joined in the market by other entrepreneurs as the coin-op industry revived, but because the earlier phonograph parlors had secured more advantageous locations, the two forms of entertainment soon combined to form one unified arcade industry.

In 1894, Dickson came up with a new motion picture concept in which the photographs were mounted on separate cards attached to a wheel similar to a rolodex that the patron turned with a handcrank, giving him a small measure of control over the speed of the play through and the ability to return to an earlier portion of the show or stop on a specific frame if so desired. Edison appeared disinterested in pursuing this concept, so Dickson contacted another inventor named Herman Casler, a friend who had collaborated with Edison on an electrically powered mining drill. Casler saw potential in the concept and worked with his friend Henry Marvin to create a working model, which they patented as the Mutoscope in November 1894. Dickson, Casler, Marvin, and investor Elias Koopman established the K.M.C.D. Syndicate to exploit the new technology before the end of the year, although Dickson’s involvement was initially kept a secret for legal reasons since he still worked for Edison. In April 1895, however, Edison dismissed his talented assistant after a falling out involving unauthorized consulting work with Grey and Otway Latham, Kinetoscope operators that wanted to build their own motion picture camera. Dickson briefly joined the Lathams’ business, but he disliked working for the brothers and soon focused his attention on K.M.C.D., which morphed into the American Mutoscope Company in October 1895. In 1896, American Mutoscope opened parlors in New York, Washington, Philadelphia, and Baltimore to showcase the new machine with the intent of selling franchises for Mutoscope operation. When no one would meet the company’s asking price, however, it was forced to operate the parlors itself. The Mutoscope proved immediately and immensely popular, however, and the parlors easily paid for themselves within the first year. The Mutoscope remained the backbone of the arcade industry for the next three decades.

The next major breakthrough in arcade operation originated with a Buffalo entrepreneur named Mitchell Mark, who opened his first Kinetoscope parlor in 1894. In 1901, Mark’s arcade took in a record $35,000 for the year due to increased tourism in Buffalo as it hosted the Pan-American Exposition, driving Mark to explore new avenues of maintaining high volume patronage. Mark decided the best way to increase traffic was to lower the cost of using his machines from a nickel to a penny and then relocate to an area with heavy pedestrian traffic to ensure constant turnover. When Mark’s new business model proved successful, he opened a new arcade in uptown New York City that made enough money for him to move into a building on Union Square in 1903, at the time one of the city’s busiest thoroughfares. From this business, Mark created the Automatic Vaudeville Company of roughly thirty-five arcades. As word of Mark’s success spread throughout the country, other operators lowered the price to use their machines as well, and the penny arcade was born.

By the first decade of the twentieth century, the basic parameters of the arcade business for the next quarter century had been established. During this period, the main purpose of the arcade was to present novel experiences rather than games, acting as a sort of mechanical counterpart to the Vaudeville show. Coin-operated scales and mechanical fortune tellers would typically be placed in front of the arcade to attract business along with the latest phonograph recordings and Mutoscope shows. Inside would be additional phonographs and Mutoscopes, strength, grip, and lung testers, shockers, food vending machines dispensing gum, candy, and nuts, card dispensers featuring celebrity pictures, jokes, horoscopes, etc., machines that vended small items such as scented handkerchiefs and perfume, and a player piano for background music. As is always the case with novelties, constant rotation of products was essential to maintain customer appeal, so arcade chains like the Automatic Vaudeville Company quickly grew to dominate the business since they could rotate a group of machines between several locations, and sometimes get away with a second rotation if the machines had been gone from a location long enough to be considered new again. Unable to compete with this rate of turnover, independent operators often turned to racier Mutoscope stories featuring strip shows and other lewd behaviors to attract patrons. Despite this seedy fringe element, however, women and children were the primary patrons of coin-op businesses, and the penny arcade briefly represented the primary source of inexpensive mass-market entertainment in the big cities of the United States.

Early Manufacturers

Herbert Mills (l) and Arthur Caille, founders of the two most important coin-op amusement companies of the early 20th century

The production of arcade amusement equipment began as a cottage industry, with inventors in various towns and cities setting up small manufacturing operations to produce their coin-operated devices. With the rising popularity of the Mutoscope in the late 1890s, the coin-operated amusement industry became a big business and one of the primary forms of entertainment for an immigrant working class clientele that lacked the money to attend the theater or similar attractions. As a result, the manufacture of arcade machines soon consolidated around a few large firms offering a full range of amusement equipment. By the early twentieth century, four companies had emerged as the leading manufacturers of coin-operated amusement equipment: Rosenfield Manufacturing, Watling Manufacturing, Caille Brothers, and the Mills Novelty Company.

Born in California in 1867, William Rosenfield moved back east to his mother’s hometown of New York City with his family as a young boy. Mechanically adept, Rosenfield spent five years designing plumbing fittings before joining with a group of investors to establish the Amusement Machine Company in Jersey City in 1890. The company soon became one of the largest producers of trade stimulators and countertop gambling machines in the country, but by 1896 this business was starting to wane, so the founders decided it was time to cash out. Together with his sister, Bertha, and an investor named Francis Gribbins, Rosenfield raised $10,000 to establish his own maker of toys, tools, and mechanical novelties in September 1896 as the Rosenfield Manufacturing Company. Starting with the same gambling machines he had built at the Amusement Machine Company, by 1900 Rosenfield offered a full line of testers, shockers, peep shows, and vending machines and claimed to be the largest equipment manufacturer in the Eastern United States. The main driver of the company’s business, however, was the Illustrated Song Machine, which Rosenfield himself designed in 1899 and combined a Kinetoscope with a phonograph to provide a soundtrack.

Born in Edinburgh, Scotland, in 1862, Tom Watling came to the United States as a boy and entered the coin-op business as an operator in Cincinnati in 1889 in partnership with his older brother, John. Three years later, the Watlings moved to Chicago to serve as regional sales managers for German-American industrialist Daniel Schall, like Rosenfield an early gambling machine pioneer. In 1901, the Watling brothers incorporated as the Watling Manufacturing Company and purchased D.N. Schall and Company to manufacture their own machines. Watling was active in both trade stimulators and slot machines, but it made its real mark as the leading producer of coin-operated scales, still a popular device in the early twentieth century.

The Caille brothers, Adolph and Arthur, were natives of Detroit, where their father, Joseph, worked as a cabinetmaker. Younger brother Arthur, born in 1867, exhibited great mechanical aptitude from an early age and first made his mark in 1889 by inventing a cash carrier system, a close relative of the cash register in which money was transferred to a cashier’s desk through a wire-based transit system. In 1893, he began designing coin-operated slot machines, and in 1897 he opened the Caille Company in Detroit to produce vending machines, trade stimulators, and slot machines. Older brother Adolph, born in 1863, followed his father into the cabinetmaker’s trade, but also found himself drawn to coin machines. In 1899, he established the Caille-Schiemer Company to produce floor model gambling machines. In July 1901, the brothers combined their business ventures as the Caille Brothers Company, and a full line of testers, shockers, and peep shows soon followed. By 1904, the success of Caille Brothers made it the largest employer in the city of Detroit. Indeed, when Detroit’s automobile industry began growing just a few years later, many of its first employees were poached from the Caille Brothers operation.

The Owl Lifter, the first coin-operated tester produced by the Mills Novelty Company

As important as Rosenfield, Watling, and Caille Brothers were to the development of the U.S. coin-op industry, no company proved more successful than the Mills Novelty Company established by Herbert Mills in Chicago, a city which, thanks in large part to the success of Mills, soon became the center of the industry. Herbert’s father, Mortimer, was born in Canada in 1838, but on a trip to De Witt, Iowa, to visit an uncle he met American Kate Fuller and married the sixteen-year-old in 1866. The couple remained in De Witt until 1878, when they moved to Chicago. A prolific inventor, Mortimer claimed to have over 400 patents in his name, the most profitable of which was a gate for railway crossings he developed in 1884. In 1891, Mortimer patented a coin-operated cigar vending machine and soon after entered the coin-op industry by establishing the M.B.M. Cigar Vending Machine Company.

Mortimer fathered thirteen children with Kate, but none were more successful than Herbert, who was born in De Witt in 1870. Industrious from a young age, Herbert took employment as a “news butcher” — a person who sold newspapers and snacks on trains — at fifteen, and in 1893 he ran a peanut concession at the Chicago World’s Fair. Herbert initially entered the coin-op industry as an operator of vending machines before Mortimer signed over the M.B.M. Cigar Vending Machine Company to him in June 1897, which Herbert renamed the Mills Novelty Company.

At the time of the sale, Mortimer had been working on a new all mechanical floor model slot machine he hoped would revolutionize the business. Released by Mills in late 1897 as the Mills Owl, the machine became an unprecedented success that sold tens of thousands of units, bringing the new company instant success. In 1899, Mills moved into coin-operated amusements with the release of the Owl Lifter, a popular strength tester. Through a combination of internal development (often performed by Mortimer) and buyouts of manufacturing rights from other inventors, Mills soon offered a full line of coin-operated amusements backed by aggressive advertising and heavy investment in penny arcades to become the principle driver of the industry in the first years of the twentieth century. In 1904, Mills ran a large penny arcade at the St. Louis World’s Fair, demonstrating both the power of the company and the triumph of the industry it led. The success of that industry ultimately proved short-lived, however.

While vending and novelty machines both had their place in the early penny arcade, the backbone of the operation remained the phonographs, Kinetoscopes, and Mutoscopes that enticed patrons with sights and sounds they could experience nowhere else. By 1905, however, the introduction of cheap spring motors had finally put the phonograph within the reach of working class families, while the rise of the Nickelodeon cinema provided a new way to watch films, which could now be projected on a screen for a more impressive — and cost effective — viewing experience. At first, arcades tried to co-opt the new motion picture business by installing movie projectors in lofts above their main business areas, but by 1907 the movie theater operators had established themselves as a completely separate enterprise, and arcades were no longer the principle venue for audiovisual entertainment. The focus of arcades therefore shifted to racy peep shows that could not be found in the more respectable motion picture houses, but these shows did not bring in enough patrons to maintain high rent locations. Soon relegated to poorer areas, the surviving penny arcades quickly gained a reputation for being dirty, poorly maintained, dimly lit, and lacking in adequate ventilation. As the coin-operated amusement industry began to decline, however, a new coin-operated industry began to emerge around games of chance.